Gross mortgage lending has reached its highest January total in nine years, propelled by a rise in first-time buyers and remortgage lending.
Figures from the Council of Mortgage Lenders (CML) show gross lending reached £18.9bn in January - 6% lower than December’s lending total of £20 billion, but 2% higher than the £18.6 billion lent in January last year.
The 2017 total surpasses the previous high of £25.2bn set in January 2008.
CML economist Mohammad Jamei commented: “Overall mortgage lending continues to hold up pretty well, but we seem to have a twin-track market. Weakness in buy-to-let and home movers has been offset by an increase in first-time buyers and remortgage lending.
“A continuing acute shortage of homes being offered for sale is one aspect of a broken housing market, that looks unlikely to resolve in the near term.”
Simon Checkley, managing director at mortgage broker Private Finance, said the current lending market is formed of two contrasting halves: first time buyers and remortgaging, and buy-to-let sales.
"First-time buyer and remortgage activity continues to thrive thanks to record low interest rates and strong buyer demand.
"At the same time, buy-to-let and home mover activity – still suffering the effects of the stamp duty surcharge and tougher affordability criteria – is lagging behind.
“Strong mortgage lending cannot mask the fact that our housing market is, by the government’s own admission, broken. Lack of property supply continues to be a concern and is contributing to rising housing costs.
"There has also been a notable slowdown at the upper end of the housing market. While addressing this is unlikely to score any political points, transactions must flow across the entire market for it to be healthy.
“Buy-to-let lending is struggling, and upcoming tax changes will test the market further. Wealthier landlords – particularly those able to buy outright – will reap the rewards thanks to high demand and limited rental supply.
"But smaller investors are likely to struggle: this can only spell bad news for renters, ironically at a time when the government is increasingly shifting the focus away from homeownership.
"Policymakers need to remember that specific market segments do not exist in isolation, and a healthy rental market relies on support for landlords as well as tenants.”
